Over the years, hundreds of educational leaders from other states and countries have approached California State University chancellor Charles Reed for advice on how to build a successful system of higher education. These days, however, fewer people are asking him. That's because as the state continues to strip its schools' budgets, it's seen as less of a role model for how to use education to build a strong economy. "California had one of the best-prepared, smartest and most creative workforces in the world," says Reed, who has run California State University's 23 campuses since 1998. "That's what gave California a world-based economy. Californians have begun disinvesting in its future."
What people used to ask Reed about is known as the Master Plan for Higher Education, which was approved in 1960 to meet swelling demand from the baby-boomer generation. The plan defined specific roles for the state's three higher-education systems the University of California, California State University and the community colleges and it ensured a spot at a university for all students who qualified. Many say the first-rate system that resulted from the plan was a major reason why California became the eighth largest economy on the planet and home to Silicon Valley and a large share of the biotech industry.
As the academic year gets under way, however, it will be the third time in the past four years that the schools are operating with reduced funding. Beleaguered by a budget crisis, Sacramento has shrunk outlays for California State to $2.14 billion from almost $3 billion in 2007-08. University of California funding has seen similar reductions: shriveling to $2.37 billion from $3.3 billion. Community colleges have taken a hit as well over the past couple of years, leading to fewer enrollments and course offerings.
There is no question that universities continue to give a great education to students who earn it, says Nathan Brostrom, University of California's executive vice president for business operations. The problem is, he says, schools may not be able to keep up with a growing population and an economy that needs more and more high-skilled workers. Indeed, by 2025, the state is expected to have nearly 1 million fewer college graduates than it needs to meet projected economic demand, according to a report by the Public Policy Institute of California. It goes without saying that decreased funding isn't helping schools close that gap. "We have the capacity on the campuses," Brostrom says. "We just don't have the funding to do it."
Students most affected by the changes are trying to adapt, but it's not easy. Michelle Ko, 35, cashed in her 401(k) from a previous job and is living with her sister to be able to afford to go back to school to get a nursing degree. Last year, she tried registering for classes at six different community colleges in the Los Angeles area before she got a spot. Now she's trying to get into science classes. "There are only two classes available and they're all filled to capacity," Ko says. "I'm a little nervous right now that I'm not going to get anything that I need."
Connie Castelan, 19, has attended four colleges in the past two years, just to get to the point where she can transfer to a larger university. She had trouble affording tuition increases at California State University at Northridge, which led her to miss the enrollment date for a chemistry class she needed. She tried to take the class at two nearby community colleges, but they were raffling spots and her name wasn't picked. "If your name got pulled, then you were added. If not, then too bad," Castelan says.
How have schools responded? California State's undergraduate tuition has more than doubled. And, because the school can't afford to educate as many students as it used to, it has reduced total admissions by about 30,000. This year, California State cut class offerings and academic services like advising, and laid off part-time faculty members. In some cases, it isn't even able to make basic repairs to campus buildings, like fixing leaky roofs. University of California schools are educating more out-of-state students, who pay higher tuition. And the number of applicants to University of California campuses has risen more than admissions, making it harder to get accepted.
All of this isn't good for long-term economic growth. For every dollar the state invests in higher education, it receives a net return of $3, according to a study by University of California, Berkeley, researchers Henry Brady, Michael Hout and Jon Stiles. That's because better-educated students end up contributing more in tax revenue and are less likely to drain state resources through welfare or by going to prison. So, at a time when California is suffering from a budget deficit and a high unemployment rate, it would benefit from having more college graduates. It also hurts the economy when it takes longer for students to graduate and enter the workforce because the classes they need are full. "At this point we are in some ways resting on our laurels of having built such a great educational system, because we're certainly not making the appropriate investment," says Michele Siqueiros, executive director of California's Campaign for College Opportunity.
To be sure, while students pay higher fees and some have more trouble enrolling, they're still getting a great education. Low-income students still receive financial-aid packages, and University of California schools continue churning out world-renowned research. In other words, a main tenet of the Master Plan ensuring high-quality learning has remained intact, says University of California at Irvine chancellor Michael Drake. But that has come at a cost too: fewer new programs that make schools even better. "I spend more of my time protecting our current quality and protecting access and affordability than I do of thinking of the great ideas for tomorrow," Drake says. "We've been able to protect ourselves and maintain our excellence and we're still growing forward, but we're not growing forward at the rate that I believe we could." Indeed, California will need to do more than protect past successes to meet its future challenges.